A Middlesex County Probate and Family Court judge (Kagan, J.) decided in favor of a husband asking to end alimony after the wife's remarriage. See Gross v. Herman, in the March 28, 2005 issue of Massachusetts Lawyers Weekly.
Alimony usually ends when the recipient remarries, but that provision must be spelled out in the divorce papers. In the Gross case, the documents made no reference to alimony ending on wife's remarriage.
When the husband found out the wife remarried, he was not allowed to terminate payments without a court order or the wife's written permission. (Unlike Massachusetts, many other states allow alimony to terminate automatically on remarriage.) The wife refused to cooperate. The husband was forced to file a complaint for modification, claiming a material change in circumstances based on the wife's remarriage to a new spouse who could and should help support her.
A judge could order on-going payments after remarriage. For instance, if the court determines that the wife needs "rehabilitative alimony" for a certain number of years, the husband might be ordered to pay regardless of her remarriage. In some cases, parties agree alimony should be paid over a period of time like an installment sale to compensate the recipient for giving up property.
An example of fixed amount of alimony paid over time follows:
If a husband gives up a fifty percent interest in the wife's vacation home, and if that interest is worth $50,000, the parties might agree the wife pays the husband $6,500 a year in alimony for 11 years regardless of husband's remarriage. Although the wife ends up paying $71,000, or $21,000 more than the original $50,000 debt to the husband, she is entitled to deduct the alimony payments from her gross taxable income, thereby reducing her taxes. She also has the use of the money, albeit as a declining balance over 11 years.
Let's say the wife in our example pays 40 percent in state and federal taxes. She ends up saving 40 percent of $71,000, or $28,400. In other words, 11 years of alimony end up costing her $42,600, not $71,000 ($71,000 - $28,400 = $42,600) or less than the $50,000 she originally owed.
The husband pays taxes on $6,500 a year. If he pays 20 percent of his gross income in state and federal taxes, he ends up with $5,200 a year ($6,500 - $1,300 = $5,200), or a total of $57,200 after taxes over 11 years. Essentially, he is earning 4 percent interest on the $50,000 owed by the wife.
Both the husband and wife keep more money because the Internal Revenue Code allows the deduction of alimony payments by the paying spouse in exchange for the recipient paying taxes on alimony received.
The judge in the Gross case ruled in favor of the husband, finding that the wife had a duty to inform the husband of her remarriage because he was allowed to remove her as a beneficiary of his life insurance policy if and when she remarried.
The wife not only failed to tell the husband about her remarriage; she intentionally hid the remarriage from him and lied when asked about the possibility of remarriage.
The judge allowed the termination and ordered the wife to reimburse the husband for payments made after her remarriage, but before the husband filed and served his complaint for modification. The judge was probably penalizing the wife for her deceptive practice by ordering reimbursement from the earliest possible date. He might have ordered reimbursement from the date of the husband's complaint for modification or even the date he served the papers on the wife.
Tip: When discussing alimony with your spouse, consider terminating alimony on death of either party, remarriage of the recipient, or upon a material change of circumstances of either party. Keep in mind that a subsequent marriage may end in death, divorce, or annulment. The O'Brien v. O'Brien case, decided by the Supreme Judicial Court in Massachusetts in 1993, allowed the former wife to reinstate her alimony claim against her former husband after her subsequent marriage ended. Be sure to spell out all of the terms and conditions that end alimony, such as remarriage.
